Cheap VoIP Phone Calls

Want to make cheap VoIP phone calls? How is it possible that they let you save a lot of money compared to traditional calls?

By this time in the developed world, it is safe to assume that most people have heard of or used VoIP in some form or the other.

The average user is likely to have made a Skype call at least once or twice even if they have no idea that it is powered by VoIP technology.

Since phone carriers in many industrialized nations are already replacing their backend infrastructure to utilize fiber instead of copper lines, many people are making VoIP calls unintentionally.

Even though VoIP started growing rapidly in the consumer field because it provides tremendous cost savings, the value of reducing phone bills by 50% or more was not lost on businesses either.

Few organizations nowadays can work without making international or long-distance calls and for many businesses, the volume can easily cross over hundreds of calls a day or week.

It’s no wonder VoIP adoption in the enterprise is growing at a quick pace every year. The tough economic environment is also contributing to the pressure on businesses to cut costs even as they are forced to add value in order to compete effectively in an international marketplace. VoIP helps them do just that.

Why Are Traditional Long-Distance Calls Expensive?

It is no secret that VoIP is much cheaper compared to traditional phone calls but not many people really understand how service providers are able to keep slashing call rates, especially with long-distance or international calls which have historically been expensive.

If you ask someone, they will tell you it is cheaper because it goes over the Internet but they don’t really know why it has to be so.

But before we try to understand the economics of VoIP calling, we need to examine why international calls have always been so expensive. The older, analog method of making calls involved TDM circuits that transmitted calls over dedicated copper lines.

These copper lines have to be run into each individual house or apartment which is quite an expensive proposition. Apart from the initial infrastructure cost, the actual mechanics of a phone call also contribute to keep the rates high.

When you make a phone call – whether it is local or international – all the circuit switches between both callers are opened and reserved for the duration of the call.

This process is called circuit switching and it essentially means that the users are reserving that portion of the line for their exclusive use. During this time no one else can use those circuits and it is part of the reason why calls are charged per minute.

It is certainly true that past a certain volume of calls, additional calls don’t really cost that much for the carrier to transmit.

But phone operators have no incentive to lower the rates in the absence of competition and maximizing shareholder value generally means keeping profit margins high. On top of that, regular maintenance of the network is not free either.

What Makes VoIP Calls Cheaper?

With VoIP, voice calls are transmitted over the Internet. The human voice is converted to data packets and from then on, the voice packets are transmitted in the same way as other Internet data.

The way data packets are distributed is fundamentally different from circuit switching as described above.

Instead of opening and reserving a dedicated line between the source and destination, packet switching involves sending individual data packets onto the next node that is one step closer to the other end.

Each data packet has its origin and destination in a special section that indicates to the intermediary where it needs to go.

All the individual data packets in a particular call may not take the same route to their destination and they may not even arrive in the same order in which they were sent. However programs at either end are designed to reassemble the packets properly and convert them back to voice signals.

As we can see, making a VoIP call will not be more expensive than sending an email or a document on the Internet. As long as the phone call does not touch any part of the PSTN network, calls may even be free.

Why Businesses Prefer VoIP

The cost of transmitting a phone call through the POTS network and through VoIP are fundamentally different. This is why service providers are able to offer international calls at a fraction of the price charged by traditional carriers. In terms of quality,

VoIP technology has improved to the point where the difference between calls is indistinguishable to the end-user.

A vendor like VoIPstudio can take advantage of the technology to offer clients multiple options – they can either pay as they go (including a small basic charge for user per month) or sign up for unlimited domestic/international calls.

If a company doesn’t need unlimited calls, they can choose to use metered calling. On the other hand, enterprises with high-volume can always benefit from unlimited minutes.

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